Pay equity: Employer requirements

Pay Equity is a requirement on Ontario employers to ensure that workers are paid equally for work of equal value, regardless of their gender. The requirement on employers arises out of the Pay Equity Act, which was passed by the Ontario Government in 1987 and became effective January 1, 1988; there was an amendment to this Act in 1993 as well. Generally people are aware that women are supposed to be paid equal amounts as men for doing equally the same jobs; people typically aren’t aware of the fact that there is a requirement on employers in Ontario to have a Pay Equity Plan in place to ensure compliance within their organizations.

It is easy to confuse Pay Equity and Equal Pay for Equal Work. The key difference is that Pay equity can compare different jobs, like a nurse and an electrician as it compares the value of the different jobs on the basis of levels of skill, effort, responsibility and working conditions involved. Equal Pay for Equal Work, on the other hand, compares work that is substantially the same, requiring the same skill, effort and responsibility and performed under similar working conditions in the same establishment.

What does this plan require?

Employers need to complete job-to-job comparisons of job classes typically done by men and women. So, where a job is typically performed by a female, the rate of pay paid for that job must be compared to the rate of pay for a male in the same organization that are similar. The amendment in 1993 to the Act recognized that there may not be a male-performed job class within the same organization to compare to, and so provided another option for comparison in which employers can compare their female pay rates to other organization’s female pay rates that have already been compared (this is only in the public sector).

If, for whatever reason, pay equity cannot be achieved, the employer needs to notify the Pay Equity Office by completing a Notice of Inability to Achieve Pay Equity.

The Pay Equity Plan itself is a document that the employer prepares subsequent to completion of the job comparisons. This document provides employees with information as to how pay equity has been achieved for that organization. There are specifics that are to be included in the Pay Equity Plan, those specifics can be found in the Pay Equity Act; sample Pay Equity Plans can be found here.

The plan must also be “deemed approved”. This means that the employer and bargaining agent must agree and sign off on the plan (if unionized) or be reviewed by employees in a non-unionized environment.

The Pay Equity Plans apply to private sector employers with 10 or more employees and public sector employers.